Truck repossessions increased significantly in 2007

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Repossessions and liquidations of tractor-trailer trucks increased 110 percent in 2007 compared with 2006, according to Nassau Asset Management’s NasTrac Quarterly Index. In addition, repossessions and liquidations of construction, printing and machine tool equipment declined in a year-to-year comparison, while medical equipment repossessions rose.

Nassau Asset Management tracks equipment trends as part of its business providing collections, repossessions and remarketing services to the nation’s leasing and finance industry. “We are seeing a very significant correction in the market,” says Edward Castagna, president of Westbury, N.Y.-based Nassau. “Even in a category such as construction equipment, where the 12-month total showed a decline, repossessions were up significantly in the second half of 2007.”

However, Castagna also points out, “Nassau is still selling equipment because there are still some very vibrant businesses that need equipment, have good credit and still look good on paper. These businesses made conservative financial decisions, maintained focus on their core business values, and now flush with equity. They are taking advantage of their position in the current economy.”

Nassau Asset Management also is seeing a growing international presence in the U.S. market via the Internet. Castagna estimates that Nassau’s website receives 700,000 hits each month, many of them coming from international companies. “These companies are coming forward to review the equipment online,” Castagna says. “They then bid on it and come to the U.S. to inspect it and then purchase.”

Nassau Asset Management cites several reasons for the 110 percent increase in truck repossessions and liquidations. Leading the way is the decline in homebuilding, which affects a number of peripheral business sectors, most of which utilize trucks. “From the forest to the sawmill to the construction site, along with the movement of people in and out of those homes and the delivery of appliances and furniture to the home, there are trucks involved in every step of the process,” Castagna says. “The rings continue to expand out of the housing epicenter.”

In addition, government regulations (including restrictions on travel time), rising fuel costs and competition placed greater financial strain on businesses that utilize trucks. Low interest rates in the past few years and significant sales of the remaining trucks with 2006 engines, as compared to the less proven ’07 versions with tougher emissions standards, led to an increase in late model trucks on the market, driving down prices in the used truck market.

As further proof of the decline in sales in new trucks, recent truck registration data from market research firm R.L. Polk & Co. showed registrations of new Class 8 trucks fell 37.8 percent from 2006; 169,900 new Class 8 trucks were registered in 2007, compared with a record 272,700 units the previous year. The Polk report also indicated the total number of Class 8 vehicles in operation rose just 2.2 percent over the same period last year. For the year, truck manufacturers sold 150,965 Class 8 vehicles in 2007, the lowest number since 2003 and a 46.8 percent fall from 2006.

To view a complete video report on Nassau Asset Management’s NQI for 2007, go to